Pension cutbacks affecting Standard Life sales

Savers cutting back on pension payments and market turbulence dented UK business in the first half of the year, life and pensions giant Standard Life said today.

UK new business sales were down 15 per cent to £1.53billion - due to 'lower asset values as well as reduced increment levels', the Edinburgh-based group said.

When payments by current customers are cut, this feeds into the firm's 'new business' sales to reflect lower premium values. Market turmoil has also impacted the value of assets being transferred into its schemes.

Trouble looming: Savers cutting back on their pensions isn't good news for Standard Life

Despite the overall fall, Standard Life said the number of customers
opening tax-efficient Self Invested Personal Pensions (SIPPS) rose 13
per cent to 74,700, while its corporate pensions business performed
well.

Tumbling stock markets eroded the group's capital buffer from £3.3billion to £3.1billion during the first half of the year.

This also sent the firm to a bottom line pre-tax loss of £20million
from a £161million profit the previous year. At the underlying level,
operating profits slid 35 per cent to £348million.

Chief executive Sandy Crombie said: 'The recession has had an inevitable impact on our performance in the first half of 2009.